Do Weberian Bureaucracies Lead to Markets or Vice Versa?
A Coevolutionary Approach to Development
Yuen Yuen Ang
University of Michigan
Department of Political Science
Email: yuenang[at]umich.edu
Chapter in
States in the Developing World
Edited by Atul Kohli, Deborah Yashar, and Miguel Centeno
Cambridge University Press
Forthcoming
Are Weberian bureaucracies a precondition for capitalist markets or is it the other way
around? According to the developmental school, state bureaucracies organized along
Weberian precepts is necessary for successful state-led growth. Yet some level of
economic wealth also appears to be necessary for achieving such desirable institutions.
Departing from conventional linear approaches to development, this essay develops and
applies a coevolutionary approach that traces the mutual adaptation of bureaucracies
and markets among local states in China. My analysis demonstrates that the particular
features of bureaucracy that promote growth vary over the course of development, even
among locales within a single country. More surprisingly, I find that the bureaucratic
forms that initially sparked growth actually defied Weberian norms of technocratic
specialization and impersonality. In other words, in rethinking the relationship between
markets and institutions, we must distinguish between market-building and marketpreserving institutions. Conventionally good institutions like Weberian bureaucracies
are necessary to preserve markets after they have already emerged; however, it is the
adaptive refashioning of preexisting “weak” institutions that build markets in the first
place.
0
1
Scholars and policymakers have long agreed that the establishment of effective
bureaucracies organized along Weberian precepts is a foundation of capitalist markets.
This axiom is especially true among developmental states—late-developing economies
that require strong, purposive state interventions to accelerate processes of economic
catch-up (Gerschenkron, 1962). Yet the belief that Weberian bureaucracies are necessary
for state-led growth begs the question of under what conditions and how such
bureaucracies arise in the first place. Although effective state agencies seem
indispensable for markets, economic growth also seems necessary for achieving these
institutions.
Do Weberian bureaucracies lead to capitalist markets or is it the other way
around? More broadly posed, which comes first in development—state capacity or
economic growth? Existing responses may be divided into three groups.
The developmental state school argues that it is the decisive establishment of
Weberian bureaucracies that preceded and paved the way for developmental success
(Woo-Cumings, 1999). According to Weber (1968), the type of bureaucracy that
complements market capitalism must possess certain legal-rational attributes:
separation of public office from private gains, eradication of corruption, functional
specialization, reliance on technical expertise, meritocratic recruitment, to name a few.
Qualitative studies of the East Asian miracle economies, including Japan (Johnson,
1982), South Korea (Amsden, 1989; Evans, 1995), Taiwan (Wade, 1990), and Singapore
(Huff, 1995), all conclude that these governments were able to effectively promote the
economy because they had first established professional civil services and eradicated
petty corruption. Quantitative studies by Evans and Rauch (1999; 2000) further
demonstrate that the degree of “Weberian-ness” and economic growth are positively
correlated.
Another school, associated with modernization theory (Inglehart & Welzel, 2005),
contends that Weberian bureaucracies—and market-supporting institutions in general—
are a consequence of economic prosperity, rather than its precursor and cause. In a
cross-national regression analysis of income per capita and the World Bank’s measure of
“government effectiveness,” Kurtz and Schrank conclude: “there is far more reason to
believe that growth and development spur improvements in governance than vice versa”
(2007, 538). Pointedly, they question the developmental state literature: “The
Kuomintang [the ruling party in Taiwan] ruled mainland China through a combination
of cronyism, clientelism, and naked force until 1949. It is hard to imagine that these
same political leaders created a ‘developmental state’ in Taiwan out of whole cloth a few
short years thereafter” (2007, 541). On a similar chord, Goldsmith’s (2012) comparative
case study of four countries suggests that civil service reforms were successfully enacted
only after these countries had become sufficiently wealthy.
Yet a third body of literature agrees that Weberian bureaucracies are a
prerequisite for developmental success but argues that the acquisition of such
institutions is a function of unique historical experiences. Kohli (2004) brings attention
to the role of colonial legacies, stressing that third world countries had different starting
points when they embarked on state-led industrialization after WWII. Japan’s brutal but
invested colonialization of South Korea laid the foundation of a modern bureaucracy,
2
which inadvertently empowered the South Korean government to pursue developmental
goals in the 1970s. By contrast, Nigeria was “governed on the cheap” by the British; upon
independence, it was barely a modern state and thus lacked the capacity to steer the
economy. Importantly, Kohli’s study suggests that the success of the East Asian
developmental states was exceptional. In his words, “Very few developing countries
embarked on their quest for industrialization with such favorable conditions already in
place” (2004, 103).1
All three schools of thought are correct—but I argue that they are only partially
correct. The developmental state school argues that Weberian bureaucracies lead to
markets, but it is unable to account for the origins of effective and coherent
bureaucracies. The modernization school argues that growth enables state capacity
building, but it does not explain the sources of economic growth. The historical school
points rightly to the colonial origins of differing starting points among late developers,
but it leaves few indications as to how poor and weak states, lacking the right history,
might ever escape the poverty trap.
Instead, I propose an alternative—coevolutionary—theory of the relationship
between Weberian bureaucracies and capitalist markets. As Weber underscores in
Economy and Society, development is by nature multi-faceted change, entailing not only
the rise of industries and markets, but also a radical remaking of society, administration,
and politics. As Weber famously states, “Capitalism and bureaucracy have found each
other and belong intimately together” (1968, 1465). And he emphasizes, “This condition
is everywhere the product of a long development” (1968, 957). In other words,
development is coevolutionary. States and markets adapt to each other and evolve
together over time. Our conventional focus on positing linear causal relations between
dependent and independent variables (i.e., either state capacity causes economic growth
or vice versa) has obscured the obvious interdependence between growth and
governance.2
Although the idea of “things changing reciprocally” (coevolve) is quite intuitive,
the task of systematically documenting the processes of coevolution among many
interacting parts is far from easy. The first-order challenge of studying the endogenous
relationship between economy and bureaucracy is methodological. Hence, one objective
of this essay is to outline an analytic template for mapping the steps of coevolutionary
paths.
After introducing this template, I will demonstrate its explanatory utility by
applying it to analyze the mutual emergence of professional bureaucracies and state-led
industrial growth among local governments in China. Reform-era China presents an
exceptionally instructive case because within the span of a single generation, China has
undergone remarkable economic and bureaucratic transformation, surpassing even the
East Asian Tigers in speed and in magnitude (Brandt & Rawski, 2008, 1). I focus on the
On similar arguments about the long-lasting effects of colonialism on present-day development outcomes,
see (Acemoglu & Robinson, 2012; Handley, 2008; Lange, Mahoney, & vom Hau, 2006).
2 As Przeworski concludes in a sweeping review of the literature on institutions, “In the end, the motor of
history is endogeneity. From some initial circumstances and under some invariant conditions, wealth, its
distribution, and the institutions that allocate factors and distribute incomes are mutually interdependent
and evolve together” (2004, pp. 185, emphasis added).
3
1
local level because although China is a single-party authoritarian regime, it is also highly
decentralized, both economically and administratively (Landry, 2008). Indeed, Oi has
characterized China as “a qualitatively new variety of developmental state,” with “local
governments in the lead role” (Oi, 1995, 1113; 1999, 3).3 Then, within a city, I narrow in
on how bureaucratic strategies of investment recruitment (i.e., attracting businesses to
invest locally), a central task of any developmental state, impacted and was in turn
impacted by the rise of markets.
By mapping the process of coevolution between bureaucracies and markets, I
arrive at a core conclusion that integrates and yet departs from conventional wisdoms:
the types of state capacity for growth promotion vary over the course of development,
not only among countries but also among locales within a single country. Even more
surprisingly, I find that the bureaucratic forms that initially sparked growth defied
Weberian norms of “good” bureaucracies, including technocratic specialization and
impersonality. In other words, it is the adaptive refashioning of preexisting “weak”
institutions that first built markets. Weberian bureaucracies serve to preserve markets.4
My conclusion extends on this volume’s efforts to disaggregate the concept of
state capacity. As the editors emphasize, “state capacity is not necessarily fungible across
issue areas” (Introduction, 4), which means, for example, that state capacity in
stimulating the economy may not translate into state capacity in promoting social
inclusion or environmental conservation. They also sharply note that state capacity is not
“a single quality that is absent or present in differing degrees;” instead, it is better
understood as “a constellation of organizational qualities” (Introduction, 29).
Joining the editors’ emphasis on the non-fungible quality of state capacity, I go
further to add a temporal dimension to the argument: state capacity varies not only by
policy areas but also by stages of development. While the idea that state capabilities may
vary at early and late growth stages has been earlier raised by others (Chang, 2002;
Doner, 2009; Rodrik, 2007), I take on a crucial task underscored by the editors of
explaining “why state capacity is not fungible” across stages of development
(Introduction, 4). My short answer is that the goals, constraints, and resources of
development are very different at market-building and market-preserving phases;
therefore, the particular bureaucratic structures that fit these varying contexts are also
different. One implication of my argument is that Weberian bureaucratic traits are not in
fact universally best. Weberian traits fit modern capitalist markets, provided that such
markets are already in place. But the bureaucracy that can effectively spur markets when
none yet exists, as we’ll see, actually functions and looks different from the modern
species.
3 Discussions of the developmental quality of China’s local governments abound. For more examples, see
(Blecher & Shue, 2001; Walder, 1995; Whiting, 2001).
4 Dominant theories in political economy that posit “good” institutions (private property rights protection
paired with limited government) as necessary for growth refers, as Weingast terms, to “market-preserving
institutions” (North & Weingast, 1989; Weingast, 1995). The term itself indicates that these are institutions
that preserve markets, a problem that applies to already developed economies. For developing countries,
however, the relevant concern is how to build markets—there is nothing to preserve if markets have yet been
built.
4
The Building Blocks of a Coevolutionary Framework
To study development—both market and state changes—as a coevolutionary
process, the first order of business is to define “coevolution” and its association term
“adaptation.” The words “evolve” (or coevolve) and “adapt” are commonly used by social
scientists in reference to change but seldom defined. As John Holland, a leading theorist
of complex adaptive systems, defines, adaptation is the process by which an agent “fits
itself to the environment” (1996, 9) This process of “fitting” entails four distinct
mechanisms, including variation (generating alternatives), selection (choosing among
and recombining available alternatives to form new permutations), retention (keeping
the selections or abandoning them for new selections at later periods), and niche
creation (developing a unique role and resource space in relation to other units within a
collective). As Lustick states, evolution should not be “confused with development,
progress, gradualism, or, indeed, any kind of change” (2011, 3). This is because
coevolution is a particular type of change involving adaptation among two or more parts
of a system.
To sharpen the distinctive features of coevolution vis-à-vis other types of
institutional change featured in the literature, consider the analogy of three ways in
which a tree can change. First, a tree is struck by lightning and falls to the ground. In this
instance, change happens through an exogenous shock. In this view of change, wars and
colonial conquests are viewed as shocks that abruptly disrupted existing structures,
replacing them with new ones (for example, see Acemoglu & Robinson, 2012; Kohli,
2004). These newly imposed structures, it is held, would self-reinforce and remain in
place under another shock hits. Krasner (1988) labels this type of change “punctuated
equilibrium.”
In a second scenario, a tree is eaten by termites and disintegrates months later.
This time, change happens through gradual processes, but it does not involve adaptation
between the tree and the termites. The seminal work of Thelen and her collaborators on
“institutional evolution” and “gradual institutional change” studies how institutions may
change even in the absence of exogenous shocks (Mahoney & Thelen, 2010; Streeck &
Thelen, 2005; Thelen, 2004). They bring attention to “gradual types of change” like
layering (adding a new feature to an existing institution) and conversion (changing the
use of existing features). However, it must be emphasized that gradual change does not
equate adaptation or evolution. For instance, aging is a gradual form of change. As one
ages, wrinkles are added in layering process until a ruddy face slowly but steadily turns
wizened. But aging, as we know, does not result from our efforts to adapt to the
environment; if anything, it is the other way around: we are forced to adapt the
inevitable process of aging. Coevolution is more than just a process of incremental
changes—it is an adaptive process that involves learning and mutual feedbacks.
Finally, in a third scenario, picture the acacia tree, which features many spikes on
its branches. The acacia tree evolved spikes to keep herbivores from over-eating its
leaves. In turn, herbivores adapted to the tree’s defensive mechanism by evolving spikeresistant traits (for example, giraffes evolved extra thick tongues). The animals that
evolve the strongest resistance to spikes will subsequently colonize the acacia trees. To
5
survive, other animals will have to develop other resources spaces or niches within the
ecology where they can exercise a competitive edge. This third scenario illustrates
coevolution.
The property of mutual adaptation over time in the process of coevolution
requires that we specify systematic steps to collect data for and to map this particular
form of change. Below I outline an analytic template consisting of four steps.
Four Steps of Mapping Coevolution
Figure 1 summarizes the four basic steps of mapping coevolutionary paths of
mutual feedbacks. Step 1 involves identifying two or more domains of significance (D1
and D2). Domains could be populations or spheres of activities. In the case I will later
present, I focus on the domains of economy (size and structure of industrial markets)
and bureaucracy (mode of investment promotion).
Step 2 is to identify the relevant time period and significance junctures of change
(T1 to T4). In the case of reform-era China, the relevant time period starts from 1978
(beginning of market reforms) or 1993 (beginning of an expanded phase of reforms) to
the current period.
Step 3 is to identify dominant traits in each domain in each significant period. In
the coevolution of bureaucracies and markets, the most salient institutional changes are
likely to be qualitative (or structural) in nature, rather than quantitative. Growth as
measured by GDP per capita is a quantitative change. However, even in the economy,
significant changes are often qualitative in nature, which may not be easily quantified or
even meaningful to reduce to a numerical scale. For example, in Varieties of Capitalism,
Hall and Soskice (2001) draw a distinction between liberal and coordinated market
economies. If a country evolves from one capitalist model to another over time, its GDP
figures may not change, but its structural patterns would have been profoundly altered.
This is why I illustrate institutional changes in Figure 1 as patterns, rather than as
numbers.
As Pierson points out, “Contemporary social scientists typically take a ‘snapshot’
view of political life” (Pierson, 2004, 2). Normally, when studying China or locales within
China, observers are inclined to document and draw conclusions from the most recent
problems and phenomenon. Understandably, given how quickly changes unravel in
China, keeping up with the most current developments is already a challenging and rich
exercise. However, snapshots provide only a temporally limited view of the long-term
historical process. When present outcomes are studied in isolation from earlier periods,
snapshots may even lead to erroneous conclusions, such as the belief that good
institutions observed alongside capitalist wealth had preceded and caused such wealth.
Hence, if our objectives are to understand how a currently observed status quo
emerged and evolved over time, we will need a different approach to data collection.
Instead of studying a given set of issues only in their present state, I choose to investigate
the same issues over multiple periods back in time. The product of this effort may be
likened to a panel dataset (multiple attributes observed over multiple time periods and
repeated across units). When implemented in the field, collecting a panel dataset
requires, on my part, locating and interviewing local actors who have been in office for a
6
sufficiently long period of time to have witnessed change since the 1980s. Oral histories
conducted with these actors are supplemented with archival materials and secondary
literature.5
Figure 1: Four Steps of Mapping Coevolutionary Paths
Step 4, after collecting the panel dataset, is to trace the mechanism of mutual
influence between changes observed in each domain. Concretely, this means to locate the
direction of influence of one domain on the other at a given juncture (A1), with attention
to whether the affected domain feeds back to its original source of change at a later
period (A2). I further consider whether causal influence (A1, A2) is exercised through the
mechanisms of variation (generating new options for agents), selection (shaping
incentives to select certain traits over others), or retention (reinforcing or eroding
previous selections).
Figure 1 is, of course, a stylization of my framework. In messy social worlds, there
will be numerous instances where observed patterns do not conform neatly to a zigzag
coevolutionary pattern.6 For example, coevolutionary processes may be interjected by
exogenous shocks (Krasner, 1988). Despite these real-world complications, the
The empirical material in this chapter is drawn from my forthcoming book, How China Escaped the
Poverty Trap. A detailed discussion of my interviewing procedures, the coverage of interviews, and citation
protocol is provided in the methodological appendix at the end of the book.
6 The zig-zag pattern reflects an “ideal” reciprocal pattern of coevolution. In reality, coevolutionary paths
often run in multiple directions: reciprocal, simultaneous, and lagged (Lewin & Volberda, 2003, p. 584).
7
5
procedures outlined can help guide our investigations into when, how, and why
particular dimensions of the state and the economy mutually adapt and transform
together.
Applying a Coevolutionary Approach to Local China
Having spelled out the essential steps of a coevolutionary framework, I will now
demonstrate its application by zooming in on the paths of different locations within
China. Before introducing the protagonists, a briefing of China’s administrative structure
is in order. China is a unitary political system, but administratively and financially, it is
one of the world’s most decentralized administrations (Landry, 2008; OECD, 2006).
Operating as a nested hierarchy, there are five levels of government: center, provinces
(31), cities (over 600), counties (about 2,500), and townships (about 45,000) (Lieberthal,
1995). Sub-provincial governments are responsible for funding and delivering essential
public services, including education, health, public safety, pensions, and urban
infrastructure (OECD, 2006). County governments account for half of China’s GDP
production and one third of public employment (Ang, 2012b; Kung & Chen, 2012).
Decentralization has been a key feature of China’s reform strategy. Economists
have characterized China as an “M-form” hierarchy, wherein each locale operates like a
self-sufficient and autonomous unit (Donnithorne, 1972; Qian & Xu, 1993). For instance,
cities and counties can have tremendous autonomy in shaping and implementing their
own economic and institutional plans, ranging from the choice to cultivate particular
industries, design incentive packages for investors, introduce cadre bonus schemes, to
the allocation and spending of retained tax revenue. However, local autonomy is
constrained within broad policy parameters laid out by the central and provincial
governments.7
Thus, I characterize central-local state agency in the Chinese political system as a
relationship of “directed improvisation.” The central government directs by authorizing
and yet delimiting the boundaries of localization through nationally issued mandates
(Ang, Forthcoming, Chap 3), but it is the local governments at all levels, reaching down
to the grassroots, who improvise solutions to locally-specific and ever-evolving problems.
Central authorities do not dictate to localities exactly how they should respond to
contingencies at every juncture—such a task is beyond the knowledge and reach of
central planners. Within each locality, the party-state is made up of a thin silver of elite
decision-makers (primarily the party secretary, the state chief, and members of the party
committee) and a large bureaucracy consisting of party and state organs and their
subsidiary organizations. Counties are staffed on average by about 20,000 party-state
employees.
Given heterogeneous local conditions and extensive decentralization, it is no
surprise to find a whole variety of sub-national political economies within China. Some
localities are rich and developmental but others poor and predatory (Baum &
For example, after the 1994 tax-sharing reform, local governments were given the autonomy to generate
revenue by leasing land. But they had to do so within restrictions set by the central government, which, in
this case, were quotas imposed on the amount of agricultural land that can be converted for urban use.
8
7
Shevchenko, 1999). Geography is a prominent driver of regional divisions. Much of
China’s prosperity and modernization is concentrated on the coast, provinces like
Guangdong, Fujian, and Zhejiang. These regions command ready access to export
markets, long entrepreneurial histories stretching back to imperial times, and ties to the
overseas Chinese diaspora (Rawski, 2011; Ye, 2014). The Western provinces, such as
Tibet, Qinghai, and Yunnan, are typically the most remote and impoverished. However,
because of their hinterland geography (as in the case of Tibet and Xinjiang) and presence
of restive minority populations, these provinces tend to receive more fiscal transfers and
preferential policies from the central authorities (Ang, 2012a; Wang, 2004). It is the
central provinces, including Hubei and Jiangxi, who are “caught in an awkward position”
of being “neither eastern nor western” (Xinhua, July 2, 2009). As a result, many locales
in the central region actually enjoy less aid and fewer opportunities than those in the far
west.
Regional disparities do not end at provincial borders. Measured in terms of
population, some provinces in China are the size of countries. Shandong, one of China’s
largest provinces, has a population of 91 million, larger than the United Kingdom’s. Thus,
as Kellee Tsai observes, “Within a single province, evidence can be mustered for marketpreserving federalism, local state corporatism, and even klepto-patrimonialism” (2004,
p. 18).
The years of 1978 and 1993 marked two watershed events on the national reform
timeline. In December of 1978, the central leadership headed by Deng Xiaoping
announced the decision to “reform and open.” This decision unleashed a wave of
agricultural, enterprise, fiscal, and administrative reforms throughout the country.
However, the early period of reform in the 1980s introduced only partial market reforms
(Naughton, 1995). So, for example, pricing remained partially state-controlled; there
were many restrictions on foreign investments; and private entrepreneurship was not
officially endorsed. Then, in 1993, the central leadership made a monumental decision to
shift gears from partial to full-fledged market reforms, encapsulated in the vision of
building a “socialist market economy” (Qian & Wu, 2003). For local governments, the
1993 central decision opened the doors to capitalism firmly and widely. Foreign
investments and private entrepreneurship were permitted and encouraged, which soon
replaced the earlier boom of township and village enterprises as the engine of industrial
growth. Hence, in my analyses, the story of full-fledged capitalist reforms begins from
1993.
Let me first introduce the three local cases I will later discuss. Note that my
coevolutionary analysis will focus mainly on the first case, but I wish to bring in two
other cases as points of comparison. Also, for the purpose of illustration within the
limited space of this essay, my later discussion will center only on investment
recruitment and the rise of industrial markets. There are good reasons to focus on these
two dimensions. Among low-income countries, the conversion from agriculture to
industry is a main avenue of economic growth and modernization. And in any
developmental state seeking to industrialize rapidly, prospecting foreign investors and
capital is a foremost task. Normally, we expect that the work of designing and executing
investment policies should be assigned to well-educated technocrats with economic
9
expertise. This is why the Singapore government delegated investment promotion to the
Economic Development Board (EDB), which is a star agency of the city-state. And in
South Korea, the equivalent body is the KOTRA (Korea Trade-Investment Promotion
Agency).
Investment recruitment is, of course, only one dimension of the larger
developmental enterprise. For now, I will explore only this dimension, and to highlight
the patterns of mutual feedbacks, I will also deliberately stylize the discussion, omitting
many details along the way. Detailed accounts of the coevolution among markets,
property rights structure, developmental strategies, and the dominant mode of
corruption across locales in China are contained in my book (Ang, Forthcoming).
1. Forest Hill City, Fujian province (coastal)
Fujian is a coastal province that lies across the strait from Taiwan. Forest Hill is a
city located in the interior of Fujian, with a population of about 2.5 million residents. I
use Forest Hill as my main illustrating case because this city features a combination of
growth opportunities (location in a coastal province and possession of abundant natural
resources, including coal, wood, and minerals) and constraints (it does not lie directly on
the coast and is surrounded by hills). Thus, the coevolutionary path in Forest Hill is
neither too fast nor completely stagnant.
Cities are a level of government below the central level and the provinces. Each
city has a few urban districts (qu) and suburban or rural counties (xian) under its
jurisdiction, typically with the districts at the core and the counties fanning out into the
periphery. My later description of Forest Hill applies to its core districts. Among the
districts and counties of Forest Hill, we find different factor endowments (some are
closer to the city center than others; some possess more natural resources than others),
therefore, they display different directions and speeds of state-and-market coevolution.
2. Blessed County, Hubei province (inland)
Hubei province sits squarely in the center of China. Humble County has about
600,000 residents. Although Humble County is a landlocked county, it has the
advantage of being located about an hour’s ride from the provincial capital of Wuhan.
Like Forest Hill, it also enjoys some access to natural resources, primarily wood and
stone. But Humble is one among over 100 counties in Hubei, largely unheard of outside
of its province and geographically distant from the coast and other major cities.
3. Upstart County, Jiangxi province (inland)
Jiangxi is nestled between the coastal provinces of Fujian and Zhejiang and the
central provinces of Hubei and Hunan. In terms of GDP per capita, it is among the
poorest in the country, ranked 25th out of 31 provinces in 2012. Like Humble County,
Upstart County is a landlocked locale in a central region and is even more rural than
Humble County.
10
What will we find if we take only a snapshot view of the three locations in the
present period? Table 1 summarizes my observations. As the statistics of Forest Hill City
are not comparable with the counties, I list the value of fixed asset investment in an
urban district of Forest Hill (equivalent to a county in size and administrative status),
Humble County, and Upstart County in 2014 below. In terms of investment value, the
district in Forest Hill clearly surpasses the other two cases by almost an entire
magnitude. Looking at the mode of investment promotion today, we find that the district
in Forest Hill approximates the Weberian-developmental model. In this locale,
investment promotion is delegated to a team of specialized economic agencies whose
priority, as one city official described, is to “guide and regulate investments” (B2013325). However, turning to the other two inland counties, we find the stark opposite of the
Weberian model. Investment recruitment is conducted by agencies of all stripes within
these counties—that is, it is not specialized. Even more anomalously, these agencies are
deliberately asked not to conduct their duties in an impersonal manner, as Weberian
norms dictate. A bureaucrat from the Economic and Information Office of Humble
County described, “One of our common methods of investment recruitment is termed
‘using kinship and affective ties to recruit investments’ (qinqing zhaoshang), which
means mobilizing the personal connections of local officials to secure investors” (B2015373).
Table 1: Comparing the Present Snapshot in Three Locations
Value of fixed asset
investment in 2014
Practice of Investment Promotion in
2014
Urban District within
Forest Hill City
36 Billion Yuan
Delegated to specialized economic
agencies whose focus is on “guiding and
regulating investments”
Humble County
19 Billion Yuan
All county agencies, regardless of
nominal functions, are enlisted to
recruit investors using their personal
connections
Upstart County
17 Billion Yuan
Similar to Humble County; described as
en masse, personalized investment
promotion for short
The current practices in the Humble County and Upstart County are clearly in
violation of Weberian precepts of professional bureaucracies, at least in terms of their
lack of professionalization (each function is delegated to a specialized office) and
impartiality (separation of public office from private affairs). Given that both of these
counties receive much lower investment than the district in Forest Hill, one might thus
conclude that Weberian norms are positively correlated with economic performance.
And indeed, if it is possible to collect a large-n dataset that measures the value of
11
investments and codes the practices of investment promotion (note: these are practices,
not openly stated policies), we will probably find statistical evidence for this cursory
conclusion. One might further advance a casual argument that it is Weberian traits that
lead to capitalist markets.
But what if instead of taking only a snapshot of the present, we also explore how
investment promotion practices manifested and evolved at earlier times? This is the
unique approach I took in my field research. Instead of investigating only present
outcomes and practices across cases, I looked back in time at all of the cases. Table 2
summarizes the practices of investment promotion in 2000 and 2014. Surprisingly,
when we compare two snapshots across the same three locations, we arrive at a different
picture. It turns out that the district in Forest Hill did not launch market reforms with a
Weberian bureaucracy—instead, it did 14 years ago what the late-developing inland
counties are doing today. We also learn that the late-developers tried or at least
considered adopting en masse, personalized investment recruitment, but the method did
not work back in 2000. This dormant system was only reactivated recently with some
success.
Table 2: Comparing Two Snapshots in Three Locations
Practice of Investment
Promotion in 2000
Practice of Investment
Promotion in 2014
Urban District within
Forest Hill City
All county agencies, regardless
of nominal functions, are
enlisted to recruit investors
using their personal
Delegated to specialized
economic agencies whose
focus is on “guiding and
regulating investments”
Humble County
County officials hoped to
attract investors, but it was “all
talk and no action;” even when
leaders tried, they failed to
produce results.
All county agencies, regardless
of nominal functions, are
enlisted to recruit investors
using their personal
connections
Upstart County
Similar to Humble County
Similar to Humble County
These observations raise questions that we would completely miss had we not
looked into the past. Why and how did the method of investment promotion in Forest
Hill evolve from a distinctly non-Weberian mode to its current form? Why did en masse,
personalized investment promotion not work in the inland counties before but was
reactivated again today? To answer these questions, we must map change from a
coevolutionary—rather than linear—perspective. We must also examine connections
among regions with divergent starting points and outcomes, rather than only their
variation.
12
The Coevolutionary Path of Forest Hill City
Since the beginning of market reforms, both the economy and bureaucracy in
Forest Hill has undergone dramatic transformation. GDP per capita grew about thirty
times in thirty years. In the 1970s, Forest Hill had a Maoist bureaucracy that was barred
from contact with the outside world and from engaging in capitalism. Today, its
bureaucracy actively counsels the city’s champion enterprises to invest overseas and to
build national brand-names. Over the years, the government of Forest Hill also
mobilized capital and political support from higher-level governments to construct a
network of railways that connected the otherwise hill-locked city to other major cities.
Only thirty years ago, Forest Hill was a backward agrarian society, but today it is
congested with factories, mega-malls, highways, and heavy traffic.
How did this great transformation come about? Following the developmental
state literature, one would expect that the city had resolutely revamped its bureaucracy
along Weberian precepts. Then, with a professional civil service in place, it introduced
coherent developmental policies, which then led to rapid economic catch-up. Such a plan
would have involved many concrete measures. Limited by space, we shall consider two
basic measures here that were well-documented among the East Asian national
developmental states (Amsden, 1989; Amsden & Chu, 2003; Evans, 1995; Johnson, 1982;
Wade, 1990).
1. The city government would have created specialized elite economic agencies,
equivalent to MITI in Japan and EDB in Singapore.
2. The city government would have offered market friendly services and incentives
to attract investments in industries of comparative advantage.8
With these measures in place, as developmental states like South Korea and Singapore
appeared to have accomplished intensively, the city should be ready for economic takeoff.
That, however, was not the story of Forest Hill. Instead, the story unfolds in this
three-step sequence: Exploit preexisting weak institutions to build markets  emerging
markets stimulate strong institutions  strong institutions preserve markets. For lack of
better term, I use “weak” institutions to encompass norms and practices that defy the
formal, modern, and Weberian (“strong”) institutions found in advanced market
economies.
Exploit Preexisting Weak Institutions to Build Markets
For most parts of China, the starting point of attracting external capital and
investments was 1993. Although “reform and opening” was announced in 1978, the pre1993 reforms proceeded with political caution. With the exception of a few special
economic zones, localities were not allowed to openly embrace foreign investments.
However, when the central leadership made the decision in 1993 to “build a socialist
market economy,” that is, to deepen and expand capitalist reforms, locales were finally
8 Strategic efforts by state planners to craft “comparative advantages” (e.g. light manufacturing and
electronics in Taiwan, heavy industries and ship-building in South Korea) were a key to developmental
success (Woo-Cumings, 1999, p. 139).
13
given the green light to seek capital and businesses from beyond their city and even
overseas.
How might the decision-makers of Forest Hill City (the leaders and the
bureaucrats who counsel these leaders) adapt the bureaucracy to capitalize upon new
economic opportunities? The decision-makers mulled over two options. The first option
was to specialize. The city already had a preexisting formal bureaucratic apparatus with
various agencies that were each assigned particular functions (e.g., Investment Bureau,
Finance Bureau, Education Bureau, Department of Organization). It could charge the
Investment Bureau with the sole responsibility of courting investors and then staff the
agency with technocrats. Alternatively, it could mobilize all the agencies to court
investors using each bureaucrat’s personal connections. To execute this alternative, the
city leadership could assign investment targets to all the agencies, requiring them to
attract a stipulated value of investments each year. Attractive bonuses could be offered to
those who exceed targets. I label this second option en masse, personalized investment
promotion.
The en masse, personalized strategy presented drawbacks and even dangers.
Close personal and kinship ties between investors and patron-bureaucrats would
obviously breed corruption. From the perspective of local agencies, it would also create a
conflict of interest between enforcing regulations and attracting investors. In addition, if
all the agencies performed the same task, the type of investments attracted would likely
be uncoordinated and low quality.
Yet in the 1990s, instead of establishing a Weberian investment agency, Forest
Hill launched what was called “a beehive campaign”—the city enlisted all agencies to
court investors, assigning them targets and bonuses. And instead of relying on a team of
professionals, the city leadership urged all the cadres to mobilize their relatives,
classmates, and friends to invest in Forest Hill. This selection defies the Weberian
precepts of functional specialization and impersonality.
Given the obvious advantages of Weberian structures and the obvious problems
of en masse investment courtship, why did the city select what appears to be an inferior
option? Stated in evolutionary terms, the success criteria of the players involved shapes
their selection. At an initial growth stage, the impoverished city was desperate for capital
and investments of any kind. In the words of a veteran official, “In the past, the goal was
to push for rapid economic growth, so we welcomed any investor” (B2013-325).
Selections were also influenced by the constraints and resources at hand. In the 1990s,
the city could not feasibly secure experts to staff a professional agency (bear in mind that
this is only a third-tier city, which until today struggles to attract talents). Realistically as
well, it could not fire anyone from the cadre corps it inherited from the Maoist era.
Yet although the Forest Hill government was numerously constrained during the
early 1990s, it possessed certain unique resources. The preexisting Maoist apparatus was
especially adept at campaign-style policy enforcement, that is, to channel manpower and
resources toward narrow state-selected goals, paired with aggressive target-setting and
mass propaganda. This is a mode of policy implementation that Perry (2011) aptly
describes as “convulsive.” It can be very destructive when put to the wrong ends, as Mao
did during the terrible famine of the Great Leap Forward. However, in the reform era, it
14
may be reconstituted for the capitalist goal of investment recruitment. Commenting on
the power of campaigns, one Forest Hill official said, “I feel that our system has a distinct
advantage: it can get things done quickly and achieve great results” (B2013-323).
Another advantage unique to a pre-industrialized economy like Forest Hill is the
affective strength of personal ties. On this point, the observations of Fei Xiaotong, an
eminent Chinese sociologist, are instructive. As Fei observes, “Modern society is
composed of strangers” (1992, 42). When strangers relate to one another, they need
written rules and laws. However, the Chinese society, as Fei underscores, is primarily
agrarian (according to the National Statistics Bureau, urban population exceeded rural
dwellers for the first time in Chinese history in 2012). Traditionally, Chinese society is a
society without strangers—indeed, the term “a society of familiars” (shuren shehui)
continues to be used in China. Among familiars, trust is strong, perhaps even stronger
than laws.
As Fei admonishes, such strong bonds of personal trust among rural people starts
to erode or become misused when strangers enter the context. He writes, “These
methods cannot be used with a stranger. China is undergoing a rapid transformation that
is changing a fundamentally rural society into a modern one. The way of life that has
been cultivated in rural society is now giving rise to abuses” (1992, 44). This quote
suggests that we conventionally view personal connections, patronage, and
patrimonialism negatively not because these features are inherently bad, but because
they present a poor fit with modern societies peopled with strangers. However, in the
early 1990s, when Forest Hill had yet to industrialize and urbanize, personal connections
were a vital resource for growth promotion. By enlisting local cadres to recruit their
family and friends as investors, bonds of kinship substituted for formal property rights
protection.
Paired with en masse bureaucratic participation in courting investors was what I
call “give-away” policies. Instead of cultivating industries of comparative advantage, city
officials gave away attractions like cheap land, tax breaks, subsidized electricity, and lax
regulation indiscriminately to all investors. This prevailed because Forest Hill in the
1990s was like a start-up company, desperate for any client. Moreover, the idea of
selective development had not even occurred to the city officials; markets alone were a
novelty. Taken together, Forest Hill’s development strategies in the 1990s went against
received wisdom of what governments are supposed to do to promote investments and
growth.
When the particular constraints (lack of technocratic staff) and resources
(campaign-style mobilization and strong personal connections) of the environment in
Forest Hill in the early 1990s are taken into account, a Weberian model would not
actually fit best with the situation. When the goal of development was to seek quantity—
rather than quality—growth, en masse investment promotion was actually a more fitting
choice. Different from other aid-dependent third world nations, local officials in China
were not told by foreign consultants and aid agencies that they must abide by best
practices found in the developed world. Instead, they chose to do they thought fitted
their situations. They probably did not know or care whether their choices defied best
practices.
15
Emerging Markets Stimulate Strong Institutions
Forest Hill’s aggressive investment campaign worked, conditional upon its
proximity to the coast, with access to investors from Taiwan, and possession of abundant
natural resources. In 1996, the city’s GDP per capita was over 5,000 Yuan; five years
later, it jumped to 8,000 Yuan. Although GDP growth was rave news, the city confronted
a novel contingency: the industrial market was a mess. As all the bureaucrats had
participated in wooing investors, all sorts of investment arrived, many of which were
clearly incompatible with one another. One official recalled the situation: “Back then, our
commercial parks had no plan. A tofu factory set beside another factory making
fiberboards. How was that going to work?” (B2013-324). During the 1990s, the city had
several toy factories in operation. However, as these factories lacked auxiliary producers
(such as makers of plastic parts and packaging), they were unable to sustain production.
Entering into the 2000s, the city accumulated more industries and a larger tax
base. At the same time, its pool of natural resources was shrinking; land was becoming
scarcer; forests were being depleted. The costs of environmental damage built up.
Further, as the quote above suggests, the city’s officials learned from the failures of
previously indiscriminate and uncoordinated industrial plans. So now that the city was
no longer hungry, and hence pickier, concerns of long-term sustainability and
comparative advantages being to enter the minds of policymakers.
From 2001-2005, the city underwent a major industrial restructuring effort. The
city closed small factories in wood and paper production and inefficient small mines.
State-owned cement factories were merged and restructured, so that they could manage
larger projects that tapped on economies of scale. Two enterprises, specializing in mining,
metal refining, and machinery production, emerged triumphant from an earlier period of
chaotic markets and intensive competition. They would soon become the twin pillars of
the local economy, around which state planners would select and build the city’s
comparative advantages. As the economic focus shifted from quantity to quality
investments, the type of developmental policies turned from give-away to selective. In
the words of one veteran bureaucrat, “We went through a process from attracting capital
and investments to selecting capital and investments” (B2013-325). Benefits became
targeted at investors in priority industries, and low-end polluting enterprises were
gradually phased out. Meanwhile, a targeted developmental strategy requires
specialization and coordination on the part of bureaucracy. Thus, as policies evolved
toward selectivity, the beehive campaign was dismantled and replaced with Weberian
traits.9
Strong Institutions Preserve Markets
Today, the agencies of Forest Hill no longer have mandatory investment targets
or bonuses. Rather, investment work is delegated to a team of specialized economic
agencies, whose function, as earlier mentioned, is to “guide and regulate investments”
Importantly, this does not mean that corruption was eradicated among local governments. Far from that,
the dominant mode of corruption evolved, becoming more sophisticated and concentrated among the top
elites, even as the administration progressively Weberianized. This process in China closely parallels the
evolution of America’s political economy during the Gilded Age (Ang, Forthcoming, Chapter 1 and 5).
16
9
(B2013-325). By successfully sparking a nascent market, the initial bureaucratic
strategies of en masse, personalized investment recruitment laid the seeds of its own
demise.
This reformed bureaucracy provided a supporting basis for the city’s new
development priority: to restructure the economy and cultivate targeted industries. By
2006, GDP per capita had doubled compared to only five years ago. Beyond the overall
size of the economy, the industrial composition had also changed. The share of GDP
produced by the city’s four major industries almost doubled within a five-year period
since 2001. It took twenty years, well into the late 2000s, before Forest Hill showed
some semblance of the East Asian developmental model, featuring specialized agencies
and a selective growth strategy of “picking winners” (Evans, 1995). Bureaucratic
professionalization and selective developmental policies emerged together with—rather
than preceded and caused—economic growth and restructuring. What first attracted
capital and built markets was an adapted structure of bureaucracy that defied Weberian
norms.
To be clear, the story of Forest Hill’s development is far from over. Officials in
Forest Hill emphatically agreed that their city had only reached a “launching stage.”
Although the city has escaped absolute poverty and approximated middle-income status,
their list of worries about the future ran long: exhaustion of natural resources, severe
environmental pollution, vulnerability to global economic shocks, low technological
content of local products, lack of skilled professionals, and so on. The challenges facing
Forest Hill are broadly symptomatic of the challenge of escaping the “middle-income
trap,” of which the Chinese leadership is acutely aware (World Bank & State Council,
2013).
Figure 2 summarizes and contrasts the conventional linear logic of development
with my coevolutionary account. The particulars of any coevolutionary narrative will, of
course, vary across contexts. Readers are advised not to fixate on whether particular
measures adopted in Forest Hill can be replicated in other countries (even other locales
in China cannot replicate the same measures at the same time). What is generalizable,
instead, is the sequence of coevolutionary steps. As Figure 2 illustrates, bureaucracy does
not come in two dichotomous choices: either Weberian or non-Weberian (or sometimes
referred to as patrimonial). Rather, between them, there can be many intermediate
permutations adapted from preexisting socio-political features—improvising such
institutions is the first step toward building markets. Also, markets are not a binary
variable: either you have them or you don’t. We should at least draw a basic distinction
between emerging and mature markets. Emerging markets are fledging, promising, but
also typically chaotic (think tofu factory beside fiberboard maker). Conventionally good
institutions like Weberian bureaucracy complement and preserve mature capitalist
markets. The making of emerging markets, however, calls for drastically different
stimulus.
17
Figure 2: Comparing Conventional vs. Coevolutionary View of Development
CONVENTIONAL VIEW
COEVOLUTIONARY VIEW
MARKET
BUREAUCRACY
MARKET
BUREAUCRACY
Impoverished, preindustrialized
economy
Bureaucracy lacking
Weberian qualities
Impoverished, preindustrialized
economy
Bureaucracy lacking
Weberian qualities
Improvise new
bureaucratic mutation
using preexisting
“weak” features
(personal connections
and communist
campaigns)
Adopt Weberian
best practices and
transform into
effective
developmental
bureaucracy
Rise of emerging
markets
Capitalist growth
follows
Emerging markets
change priorities and
resources  stimulate
further bureaucratic
adaptation (selection of
Weberian traits)
Rise of mature
markets
The Paths of Other Late Local Developers
The experience of Forest Hill is only one among numerous other sub-national
paths within China. Facing a mixture of growth endowments (located in coastal province
with abundant natural resources) and constraints (hill-locked), Forest Hill’s
transformation is less speedy and dramatic than metropolises like Shanghai or cities
located directly on the coast. What were the paths of locales in the central regions like?
For decades since market reforms began, Humble County was poor. In selfdeprecating humor, one cadre remarked that the county’s financial situation was worse
than “eating [rice] budgets,” a term referring to poor counties that exhaust budgets on
feeding the bureaucracy. He said it was more like “eating [thin gruel] budgets,” meaning
the county had little to spare even for the most basic needs (B2013-329). Although the
economy had grown and public finances improved over the past few years, budgets
18
remained tight in Humble County. Many agencies still lacked adequate funding and
salaries.
What did the trajectory in Humble County look like in the 1990s through the
2000s? Did it not try the adaptive strategies used in Forest Hill City during its early
growth stage? Actually, some officials of Humble County did try (or at least considered
trying). But stuck inland, their attempts did not produce a miracle. During the 1980s,
like other localities throughout the country, Humble County had set up township and
village enterprises (TVEs). But with limited access to networks, investors, and clients,
the TVEs performed poorly, and many ended deep in debt. Then, in the 1990s and early
2000s, the county heeded the call of central initiatives to restructure state-owned
enterprises (SOEs) and court investments. But the efforts in Humble were largely
superficial. Restructured SOEs and TVEs did not turn into vibrant private enterprises,
as did places like Zhejiang province. In addition, efforts to court investors at that time
were futile, “more talk than action” (B2013-329), because “people didn’t even know
about this place” (B2013-331). Compared to Forest Hill, not much changed in Humble
County during the decade after 1993. Bureaucracies and markets did not co-evolve with
transformative results.
The big break for Humble County and also for Upstart County, both inland
locales in central China, arrived around 2005. The important question is: What was the
source of this big break? Why was it not available earlier? This new lease of economic life
for the central regions came from the coast, from cities like Forest Hill. Once coastal
locales reach middle-income status, they were pressured by rising factor costs at home to
replace lower-end manufacturing with higher-end activities. Factories on the coast went
spontaneously in search of investment locations in China’s own neglected backyard. This
phenomenon is termed “industrial relocation.” One might also think of it as a domestic
version of the flying geese theory; coastal regions led the process of economic and
institutional coevolution and then later on brought opportunities to the inland laggards.
When new opportunities arrived from the coast in the mid-2000s, a dormant
engine roared into action. And what type of bureaucracy and policy did Humble and
Upstart adopt? Almost the same ones as Forest Hill did over a decade ago, a mixture of
en masse investment promotion with give-away developmental policies. Uncannily, the
prevailing practices in Humble County shadowed practices that had recently been
phased out in Forest Hill. One official from Humble County described: “Assigning
investment tasks to all the departments can incentivize everyone to act together, fully
utilizing everyone’s networks and resources. We are now in the midst of an all-county
campaign to promote investment. Our county is a small place, with no particular
advantages in location or transportation. How are we going to develop economically if we
don’t pursue investments in en masse? Anyway, the whole country is doing this” (B2013318).
Yet even though we observe some striking similarities between the current
adaptive strategies of less-endowed regions and the past strategies of more-endowed
ones, the future path that will unravel in Humble County is unlikely to be a mere
replication of their richer and more developmental cousins. That is because, as a subnational late developer, Humble County presently operates in a macro environment that
19
is different from the one that coastal cities like Forest Hill encountered in the 1990s and
2000s. In recent years, the central government has articulated a different developmental
role for local states, emphasizing social services provision and environmental protection
over brute capital accumulation, in close approximation of what Evans calls the “twentyfirst century developmental state” (Evans, 2011; Evans & Heller, 2013). Even at its
current early growth stage, the officials of Humble County clearly expressed more
concern about the environment costs of rapid industrialization than their peers in Forest
Hill had.
Comparing the coevolutionary trajectories of the three locations, we learn that
the economic effects of any strategy of institutional adaptation (such as the beehive
campaign) are conditional upon basic endowments like location. This axiom applies to
standard good institutions (such as the protection of private property rights) as well.
Collier is worth quoting at length on this point: “Good governance and policy help a
country to realize its opportunities but they cannot generate opportunities where none
exist and they cannot defy gravity. Even the best governance and policies are not going to
turn Malawi into a rich country—it just does not have the opportunities” (2007, 64).
However, I differ from Collier in one critical respect, that is, while growth
opportunities may be heavily influenced by geography, entrepreneurial histories, and
natural resources, they are not static. As surrounding economies change, so too do the
opportunities for nations and locales. Humble County and Upstart County used to be
stuck; no matter how hard they tried, they could not attract investments as their coastal
peers did in the 1990s. Yet unexpectedly, their opportunities emerged another decade
later, after the economies of the first-movers had taken off. This suggests that while the
economic effects of factor endowments cannot be ignored, their effects are not fixed or
deterministic.
My approach of comparing local trajectories also suggests that we cannot study
sub-national units (and indeed countries as well) as if they are independent units of
observation—because clearly they are interdependent (on world politics, see also
Katzenstein, 1975). The point of comparing sub-national units is not to generate more
units of observation for testing or to pit them side-by-side as static regional models.
What is of interest in sub-national comparison is not just “variation in economic
outcomes” and how “local-level variables determine different local economic realities
(Rithmire, 2014, 167), but also connections across regions and how each locale’s path
spills over into the paths of other localities and collectively shapes China’s national
outcomes.
Conclusion
Do Weberian bureaucracies lead to markets or vice versa? My answer is that it
depends on the stage of development, within countries and even within locales of a single
country. We must qualify both the functions and forms of bureaucracies at marketbuilding and market-preserving phases of development. We must also distinguish
between the pressures exerted on institutional change by emerging markets versus by
mature markets. The type of bureaucracy and method of investment recruitment varies
20
for low-income compared to middle-income economies. Why? Because development
priorities evolve as a society transitions from absolute poverty to moderate income. And
because the constraints and resources of poor, rural, and communist settings are
drastically different from those of moderately wealthy, urban, and capitalist systems.
Particular organizational forms, rules, and policies work only when they fit the goals,
constraints, and resources of particular environments. Even a Weberian bureaucratic
structure—as universally desirable as it may initially seem—is not actually universally
best.
To suggest that early development requires institutions different from those of
late development is not new. In an incisive historical study, Chang (2002) argues that
contrary to the norms of limited government that are commonly prescribed to
developing countries today, wealthy Western nations had actually deployed
interventionist policies to kick-start their domestic industries when they themselves were
developing. Likewise, Rodrik asserts that “igniting economic growth and sustaining it are
somewhat different enterprises” (2007, 16). Doner’s (2009) study also demonstrates that
while Thailand had developed the right state capabilities to support early
industrialization, it failed to continue evolving its political institutions for technological
upgrading.
My chapter clearly extends on these themes, but I seek to go beyond them in one
key respect. I emphasize that the first step of development entails “exploiting preexisting
weak institutions to build markets.” Poor societies almost always begin with an
abundance of weak institutions, such as informal and personal connections, communal
and tribal affiliations, patrimonialism, weak enforcement of formal rules, and so on.
Normally, such features are viewed as impediments to economic development that need
to be removed before markets can grow. I argue the opposite: what we normally perceive
as weak institutions are actually the raw material that we have to improvise upon in
order to spark emerging markets. But unless we drop our perceptions that only certain
particular organizational forms are good and others are inferior, we cannot imagine and
register, much less harness, the developmental potential of apparently weak institutions.
The recognition that state capacity varies at different stages of development—that
is, at different levels of income, industrialization, and modernization—is especially
significant for developing countries. As the editors underscore in the Introduction, “Most
developing countries are struggling to move beyond the dichotomous choice posed by
‘Washington Consensus’ versus ‘developmental states” (footnote 11, 20). The
Washington Consensus is a theory for advanced capitalist economies in the West. The
developmental state model is a theory for a select group of countries in Asia endowed
with unique historical conditions and exceptionally strong bureaucracies. Neither set of
conditions applies to much of the developing world, which is poor and yet modernized.
For these societies, we need to explore how development may occur not because of
strong institutions, not even in spite of weak institutions—but because of weak
institutions.
21
References
Acemoglu, Daron, & Robinson, James. (2012). Why nations fail: the origins of power,
prosperity and poverty. New York: Crown Publishers.
Amsden, Alice H. (1989). Asia's next giant : South Korea and late industrialization. New
York: Oxford University Press.
Amsden, Alice H., & Chu, Wan-wen. (2003). Beyond late development : Taiwan's upgrading
policies. Cambridge, Mass.: MIT Press.
Ang, Yuen Yuen. (2012a). Cooptation and Clientelism in China's Single-Party Regime.
Working Paper. Department of Political Science, University of Michigan Ann Arbor.
Ang, Yuen Yuen. (2012b). Counting Cadres: A Comparative View of the Size of China’s Public
Employment. The China Quarterly, 211, 676-696.
Ang, Yuen Yuen. (Forthcoming). How China Escaped the Poverty Trap. Ithaca, N.Y.: Cornell
University Press.
Baum, Richard , & Shevchenko, Alexei. (1999). The "State of the State" In M. Goldman & R.
MacFarquhar (Eds.), The paradox of China's post-Mao reforms. Cambridge, Mass.:
Harvard University Press.
Blecher, Marc, & Shue, Vivienne. (2001). Into Leather: State-led Development and the
Private Sector in Xinji. The China Quarterly, 166(166), 368.
Brandt, Loren, & Rawski, Thomas G. (2008). China's great economic transformation.
Cambridge ; New York Cambridge University Press,.
Chang, Ha-Joon. (2002). Kicking away the ladder : development strategy in historical
perspective. London: Anthem.
Collier, Paul. (2007). The bottom billion : why the poorest countries are failing and what
can be done about it. Oxford: Oxford University Press.
Doner, Richard. (2009). The politics of uneven development : Thailand's economic growth
in comparative perspective. Cambridge: Cambridge University Press.
Donnithorne, Audrey. (1972). China's Cellular Economy: Some Economic Trends Since the
Cultural Revolution. The China Quarterly, 52(52), 605.
Evans, Peter. (1995). Embedded autonomy: states and industrial transformation. Princeton,
N.J.: Princeton University Press.
Evans, Peter. (2011). The Capability Enhancing Developmental State: Concepts and
National Trajectories. Paper presented at the Princeton Conference State Building in
the Developing World: Latin America, São Paulo, Brazil
Evans, Peter, & Heller, Peter S. (2013). Human Development, State Transformation and the
Politics of the Developmental State. In S. Leibfried, F. Nullmeier, E. Huber, M. Lange,
J. Levy & J. D. Stephens (Eds.), The Oxford Handbook of Transformations of the
State: Oxford University Press.
Evans, Peter, & Rauch, James. (1999). Bureaucracy and growth: A Cross-National Analysis of
the Effects of "Weberian" State Structures on Economic Growth. American
Sociological Review, 64(5), 748.
Fei, Xiaotong. (1992). From the soil: the foundations of Chinese society (A translation of Fei
Xiaotong's Xiangtu Zhongguo) (G. Hamilton & Z. Wang, Trans.). Berkeley:
University of California Press.
Gerschenkron, Alexander. (1962). Economic backwardness in historical perspective.
Cambridge: Harvard University Press.
Goldsmith, Arthur A. (2012). Is governance reform a catalyst for development? . In K. S.
Jomo & A. Chowdhury (Eds.), Is good governance good for development? London;
New York: Bloomsbury Academic.
Hall, Peter, & Soskice, David. (2001). Varieties of capitalism : the institutional foundations
of comparative advantage. New York: Oxford University Press.
Handley, Antoinette. (2008). Business and the state in Africa : economic policy-making in
the neo-liberal era. Cambridge: Cambridge University Press.
22
Holland, John H. (1996). Hidden order: how adaptation builds complexity. Cambridge,
Mass.: Perseus Books.
Huff, W. G. (1995). The developmental state, government, and Singapore's economic
development since 1960. World Development, 23(8), 1421.
Inglehart, Ronald, & Welzel, Christian. (2005). Modernization, cultural change, and
democracy : the human development sequence. Cambridge: Cambridge University
Press.
Johnson, Chalmers. (1982). MITI and the Japanese miracle : the growth of industrial policy,
1925-1975. Stanford, Calif.: Stanford University Press.
Katzenstein, Peter. (1975). International interdependence. International organization, 29(4),
1021.
Kohli, Atul. (2004). State-directed development : political power and industrialization in
the global periphery. Cambridge: Cambridge University Press.
Krasner, Stephen. (1988). Sovereignty: An institutional perspective. Comparative Political
Studies, 21(1), 66.
Kung, James Kai-Sing, & Chen, Ting. (2012). Behind the “China Miracle": Revenue
Incentives of Local Leaders. Paper presented at the CCS Research Seminar,
University of Michigan
Kurtz, Marcus, & Schrank, Andrew. (2007). Growth and Governance: Models, Measures, and
Mechanisms. The Journal of Politics, 69(2), 538.
Landry, Pierre. (2008). Decentralized authoritarianism in China : the Communist Party's
control of local elites in the post-Mao era. Cambridge: Cambridge University Press.
Lange, Matthew, Mahoney, James, & vom Hau, Matthias. (2006). Colonialism and
Development: A Comparative Analysis of Spanish and British Colonies. The
American Journal of Sociology, 111(5), 1412.
Lewin, A., & Volberda, H. . (2003). The future of organization studies: Beyond the selectionadaptation debate. In T. H. & K. C. (Eds.), The Oxford handbook of organization
theory. Oxford, England: Oxford University Press.
Lieberthal, Kenneth. (1995). Governing China : from revolution through reform (1st ed.).
New York: W.W. Norton.
Lustick, Ian S. (2011). Taking Evolution Seriously: Historical Institutionalism and
Evolutionary Theory. Polity, 43(2), 179.
Mahoney, James, & Thelen, Kathleen. (2010). Explaining institutional change : ambiguity,
agency, and power. Cambridge: Cambridge University Press.
Naughton, Barry. (1995). Growing out of the plan : Chinese economic reform, 1978-1993.
New York, NY: Cambridge University Press.
North, Douglass, & Weingast, Barry. (1989). Constitutions and Commitment: The Evolution
of Institutional Governing Public Choice in Seventeenth-Century England. The
Journal of Economic History, 49(4), 803.
OECD. (2006). Challenges for China's Public Spending: Toward greater effectiveness and
equity. Paris: OECD.
Oi, Jean. (1995). The Role of the Local State in China's Transitional Economy. The China
Quarterly, 144(144), 1132-1149.
Oi, Jean. (1999). Rural China takes off : institutional foundations of economic reform.
Berkeley: University of California Press.
Perry, Elizabeth. (2011). From mass campaigns to managed campaigns: "constructing a new
socialist countryside". In S. Heilmann and E. Perry (Ed.), Mao's invisible hand : the
political foundations of adaptive governance in China. Cambridge, Mass: Harvard
University Press.
Pierson, Paul. (2004). Politics in time : history, institutions, and social analysis. Princeton,
N.J.: Princeton University Press.
Przeworski, Adam. (2004). The Last Instance: Are Institutions the Primary Cause of
Economic Development? European Journal of Sociology, 45(2), 165-188.
23
Qian, Yingyi, & Wu, Jinglian. (2003). China's Transition to a Market Economy: How Far
Across the River? In N. C. Hope, D. T. Yang & M. Yang Li (Eds.), How far across the
river? : Chinese policy reform at the millennium. Stanford, Calif.: Stanford
University Press.
Qian, Yingyi, & Xu, Chenggang. (1993). The M-form hierarchy and China's economic reform.
European Economic Review, 37(2), 541.
Rauch, J. E., & Evans, P. B. (2000). Bureaucratic structure and bureaucratic performance in
less developed countries. Journal of Public Economics, 75(1), 49.
Rawski, Thomas. (2011). Human Resources and China's Long Economic Boom. Asia Policy,
12(1), 33.
Rithmire, Meg. (2014). China's "New Regionalism": Subnational Analysis in Chinese Political
Economy. World Politics, 66, 165.
Rodrik, Dani. (2007). One economics, many recipes : globalization, institutions, and
economic growth. Princeton: Princeton University Press.
Streeck, Wolfgang, & Thelen, Kathleen. (2005). Beyond continuity : institutional change in
advanced political economies. Oxford: Oxford University Press.
Thelen, Kathleen. (2004). How institutions evolve: the political economy of skills in
Germany, Britain, the United States, and Japan. Cambridge: Cambridge University
Press.
Tsai, Kellee. (2004). Off balance: The unintended consequences of fiscal federalism in China.
Journal of Chinese Political Science, 9(2), 1-27.
Wade, Robert. (1990). Governing the market : economic theory and the role of government
in East Asian industrialization. Princeton, N.J.: Princeton University Press.
Walder, Andrew G. (1995). Local Governments as Industrial Firms: An Organizational
Analysis of China's Transitional Economy. American Journal of Sociology, 101(2),
263.
Wang, Shaoguang. (2004). The Political Logic of Fiscal Transfers in China China's west
region development: domestic strategies and global implications. Singapore: World
Scientific Press.
Weber, Max. (1968). Economy and society: an outline of interpretive sociology. New York:
Bedminster Press.
Weingast, Barry R. (1995). The Economic Role of Political Institutions: Market-Preserving
Federalism and Economic Development. Journal of Law, Economics & Organization,
11(1), 1.
Whiting, Susan. (2001). Power and wealth in rural China : the political economy of
institutional change. New York: Cambridge University Press.
Woo-Cumings, Meredith. (1999). The developmental state. Ithaca, N.Y.: Cornell University
Press.
World Bank, & State Council. (2013). China 2030 Building a Modern, Harmonious, and
Creative Society. Washington, D.C.: The World Bank.
Ye, Min. (2014). Diasporas and Foreign Direct Investment in China and India. Cambridge:
Cambridge University Press.
24